Is your Newsletter an Asset, a Business, or a Job?
Have you ever thought about it when you are writing one each week?
I often ask myself, "Why am I writing a newsletter?"
Deep down, I don't want to put this category as another "job" as it is too time-consuming and soul-sucking.
My Financial Principles:
The purpose of building a business or securing a job is to accumulate assets
Accumulating assets above building a business and securing another job.
Return of income from assets should exceed active income in the future.
Let's get into some definition
What is an Asset?
An asset is an economic unit with a current or future value that can be converted into cash.
This value can provide future economic benefits by generating income or appreciating the value.
Stock and bonds can be in this category. You are purchasing a piece of the company right now for a price that holds the economic value of that company and can be converted into cash in the future.
When building an e-commerce business, you are accumulating your business assets. When you work for a job in a niche industry, you are accumulating your personal assets.
The beauty of an asset is that it will go up in value without any active management. For instance, the rise of stocks and bonds is not determined by your active management but by the revenue and economic units produced by that asset. In this regard, the rise in the price of assets is passive and implicit.
How about Real Estate?
I would rule out Real Estate as a financial asset-alike.
It is a passive financial asset that can produce great equity in the future.
You may disagree with my classification.
You may shout over my ears and say that I am financially illiterate.
"Hang on a second! How is this a passive asset since we have to maintain the house and tenants?"
Let me agree with your point before I explain my reasons.
Hiring property management, maintaining tenants, and fixing property damage are actions that treat real estate as a business. If you see it as a business, the operation of that business is no longer passive since you start to operate it for some form of profit.
That doesn't contradict the idea that Real Estate is a financial asset.
The home equity that you build throughout the years is implicit. You don't actively manage the appreciation of the home—if you stop looking at it, it stops appreciating. The underlying fundamentals of appreciation and depreciation in real estate resemble the ones in the stock market.
What is a Business?
People on the Internet glorify building their businesses and vilify acquiring a job. So, let's look at what a business is and how it differs from a job.
Building a business requires active and hands-on. As a business owner, you're deeply involved in every aspect of the operation, from strategy to daily management. You make decisions that directly affect the outcome and success of your venture.
In other words, the buck starts and stops with yourself.
If you try to freelance, you will constantly accumulate clients and ensure that you get them good experience to keep generating revenue. Once you stop accumulating clients and stop providing good value to them, your business will also stop generating revenue. You must actively manage your operation efficiency and business performance to generate income.
"How about SAAS startup?"
That is also active. :) To continue generating revenue and income, you must actively manage your services, constantly monitor them, and adjust your business to future market demands.
A lot of people misunderstand business and assets. Building a business involves acquiring business assets, which can be passive.
How about my Job?
This sounded self-explanatory. Many people hate a job, including myself, but if you look closely enough, you will see that having a job is not as bad as others think.
Acquiring a job requires active time and attention commitment. You abide by a contract within an organization and perform tasks in exchange for compensation.
You have no control over the responsibilities and duties assigned to you, and you also have limited control over broader operational or strategic decisions.
You have a boss; you are *not your own boss.
Is that a bad thing?
Not necessarily.
Managing every aspect of the operation, from marketing, sales, and market research to making every single decision about the business to generate income, is a lot more time-consuming than simply focusing on an area of focus and generating a stable income.
"But you don't own anything when you are working for a job, for business, you at least own something."
That is not necessarily true as well.
Depending on your profession, and since most of you, my reader, work in tech or are engineers, you own something.
Hear me out.
Most tech companies offer equity on top of base salary. This compensation package indicates that you own a part of the business.
The best part is that if you work for an IPO company, those business assets can directly be transferred to cash compensation.
You won't get much business equity when building your own business. In fact, you can only transform that asset into cash when you sell your business.
One benefit of owning a business that most people dream of is its variability. In a job, the reward and potential growth are limited since you have no control over all aspects of the business's strategy and vision. On the other hand, a business's reward and potential growth are unlimited.
A successful business can scale operations, diversify products or services, and increase profitability substantially.
Where does my Newsletter Fall?
These are the most recent questions I ask myself as I constantly pump out software engineering advice content to you.
So…
Is it an asset?
I will rule out my newsletter as a financial asset, although I benefited indirectly from writing it.
However, I don't get to buy a mature newsletter like how I buy a mature business or stocks.
I have to build them from scratch.
It is also not passive.
If I start charging you for a $50$ annual subscription, I will be compelled to write weekly to give you the best content. If I stop writing one day, my subscriber count will not keep increasing; instead, it will stall.
However, one thing that I can say is that this newsletter is my personal asset.
It represents who I am and my presence on the Internet, and you read into my thoughts each week.
I can leverage this asset to get a better job, perhaps? But I wouldn't create that roundabout correlation between writing a newsletter and getting a job. You're better off studying algorithm questions to get that six-figure salary than writing a newsletter.
So, it is my personal asset, but not a financial one. According to the definition I gave in the previous section, that won't produce any direct monetary result.
Is it a business?
I can make my newsletter a business, and I saw many writers on this platform treat it as such.
They write a newsletter to:
get email addresses
Create a paywall on their account once they reach a 10K subscriber count
Sell them workshops or online courses
Deliver lead magnets
Sell more digital products
Put ads in their newsletter
Proof? Look at the creators in their 5-6 digit subscribers; they always have something to attract you.
I have nothing against that strategy. Overall, we are all building something to generate revenue and put food on the table, and business is business.
But is my newsletter a business as a unit (excluding the paywall, course, and digital product)?
To me, it is a no.
I didn't want to sell you my course to level up as a software engineer at the momment, but that may change in the future.
I didn't intend to also put this newsletter under a paywall either.
All I want is to share my journey, validate my knowledge with you, and have a way to express my thoughts. Thus, I can control what I write when I publish and gain that validation through engagement or likes.
"That sounded like a vanity metric."
But it helps me understand that I am going in the right direction, so a gentle like or even say that you like the article helps validate if my thoughts are sane. :)
However, at the end of the day, I am still writing on a platform, and I have no control over the events that will happen to this platform.
My boss is not myself but my reader and the algorithm.
This makes my next point.
Is it a job?
It started to become like one.
It happens slowly without me even realizing it. Here's why:
It is an active engagement. I need to constantly deliver content each week, or else this newsletter won't grow its subscriber count.
There is a boss. The algorithm, and you, the reader.
Subscriber and viewer increments are determined by an exchange in my expertise.
As I contemplated, I realized that writing this newsletter was starting to become a job.
My initial purpose in writing this newsletter is to use it as another medium to express my thoughts, validate my learnings, and build my professional portfolio.
I didn't intend to build the next software engineering newsletter, where I charge $5 monthly for my content once I reach 10K subscribers. I didn't intend to also provide news about the current scoop, workshop, or interview other fellow software engineers in the current industry.
The truth is, if this ship sailed, I don't want to write newsletters as my full-time job. Overall, I still love being in the technology industry, programming, designing systems, and immersing myself in building products at the moment. Again, my thoughts may change in the future.
It doesn't mean this is a declaration of the end of this newsletter. I view my newsletter to be a good training ground for:
Finding my voice
Expressing my thoughts in clarity
Understand marketing and copywriting
It may not tick the box for my financial principle, but it is a good medium for honing this craft and a form of expression.
It is the one that I choose to engage in.
I promised you that I would deliver one article every week, and thus, I spend most of my weekends writing a newsletter for you. For what purpose?
It was for accountability to put myself into a habit of expressing my thoughts and telling my journey of becoming a senior engineer.
But I got carried away by the noise populating the internet, chasing vanity metrics and subscriber count, and fantasizing about earning four digits on your newsletter. It compels me to pursue the same endeavor.
Therefore, I felt conflicted.
I have reached my goal to become a senior engineer in this newsletter. Now, writing about the path to senior feels like chores, where I need to go out there, find a piece of advice, and deliver it to you.
I wanted to share more than mere daily software engineer advice and continue to walk you through my journey. Overall, I can only have so much advice and anecdotes about daily software engineer practices without repeating myself repeatedly in a different sentence. But my journey is unique on its own.
You may see some changes in the content of this newsletter in the next couple of months. I haven't thought about what will change, but once I finalize my thoughts, I will share them with you.
If you are writing a newsletter yourself, what does a newsletter mean to you?